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.Management Sciences
Category: Surplus
If a market is efficient then_______?
A. the market allocates buyers to the sellers who can produce the good at least cost
B. all these answers
C. none of these answers
D. the quantity produced in the market maximizes the sum of consumer and producer surplus
E. the market allocates output to the buyers that value it the most
In general, if a benevolent social planner wanted to maximize the total benefits received by buyers and sellers in a market, the planner should?
A. choose a price below the market equilibrium price
B. allow the market to seek equilibrium on its own.
C. Choose any price the planner wants because the losses to the sellers (buyers) from any change in price are exactly offset by the gains to the buyers (sellers).
D. choose a price above the market equilibrium price
Adam smith’s invisible hand concept suggests that a competitive market outcome ?
A. maximizes total surplus
B. generates equality among the members of society
C. minimizes total surplus
D. both maximizes total surplus and generates equality among the members of society
If a buyer’s willingness to pay for a new Honda is Rs20,000 and she is able to actually buy it for Rs18,000 her consumer surplus is ?
A. Rs18,000
B. Rs20,000
C. Rs2,000
D. Rs0.
An increase in the price of a good along a stationary supply curve______________?
A. increase producer surplus
B. does all the things describe in these answers
C. decrease producer surplus
D. improves market equity
If buyers are rational and there is no market failure ?
A. free market solutions are efficient
B. free market solutions maximize total surplus
C. all of these answers
D. free market solutions are equitable
E. free market solutions are efficient and free market solutions maximize total surplus
Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?
A. Three vases will be sold, and consumer surplus is Rs80
B. One vase will be sold, and consumer surplus is Rs5.
C. One vase will be sold, and consumer surplus is Rs30.
D. Three vases will be sold, and consumer surplus is Rs0.
E. Two vases will be sold, and consumer surplus is Rs5.
If a benevolent social planner chooses to producer less than the equilibrium quantity of a good, then ?
A. total surplus is maximized
B. the value placed on the last unit production by buyers exceeds the cost of production.
C. producer surplus is maximized
D. the cost of production on the last unit produced exceeds the value placed on it by buyers.
E. consumer surplus is maximized
An increase in the price of a good along a stationary demand curve ?
A. improves the material welfare of the buyers.
B. decrease consumer surplus
C. improves market efficiency.
D. increase consumer surplus.
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